Buy now/pay later matchmaker raises $44 million

Merchants riding the buy now/pay later wave continue to support fintechs like Affirm and Klarna that target consumers directly with instant-financing offers, but increasingly they’re welcoming multiple BNPL providers on their websites to maximize sales.

ChargeAfter, a startup based in New York, has been developing a platform for five years that allows merchants to access multiple BNPL lenders. It recently raised $44 million in Series B financing led by The Phoenix to significantly expand its reach to merchants and lenders.

The influx brings ChargeAfter’s total funding to about $60 million with backers including Visa, BBVA, Synchrony Financial and Citi Ventures.

“What we’ve seen so far in BNPL is only the tip of the potential that exists for banks to give consumers a wide range financing options that go way beyond zero-interest loans, to include short- and long-term financing and lease-to-own options,” said Meidad Sharon, ChargeAfter’s founder and CEO, who launched the firm in 2017.

Nearly two thirds of U.S. consumers made their first BNPL purchase within the last 12 months, and over half of current users plan to make another purchase via BNPL this year, according to a survey BNPL fintech Sezzle conducted this month among 1,153 online shoppers.

ChargeAfter operates behind the scenes, connecting merchants’ acquiring banks and payment gateways to banks through a white-label BNPL platform with specific financing offers for different industries including electronics, furniture, appliances, auto parts and generic merchandise, he said.

Eric McNatt

“There are still many layers of connectivity that need to be built, but with new funding we’re on track to offer financing deals this year from 70 to 80 lenders in the U.S. and globally,” Sharon said.

Computer retailer Lenovo has been using ChargeAfter’s white-label BNPL solution for more than a year. At the checkout, consumers select Lenovo Financing and apply by providing a few pieces of basic information. Consumers may receive instant-financing offers on specific purchases from Synchrony Financial, Genesis Credit, Katapult, Behalf and Business Financing.

ChargeAfter isn't the only company with this model. ACI Worldwide recently announced plans to create a platform enabling merchants to offer dozens of different BNPL offers on websites from more than 70 lenders, depending on the creditworthiness of borrowers.

“The BNPL market so far only reaches a small segment of potential borrowers, because there’s usually only one installment loan option available to a customer at checkout, and if it’s not a match, there’s no deal. What we’re building will connect millions more consumers with millions more deals, in real time,” Sharon said.